Question 1-8

Highland Company produces a lightweight backpack that is popular with college students. Standard variable costs relating to a single backpack are given below: Standard Quantity or Hours ? ? ? Direct materials Direct labor Variable manufacturing overhead Total standard cost per unit Standard Price or Rate $ 6.00 per yard ? $ 2 per direct labor-hour Standard Cost $ ? ? ? $ ? Overhead is applied to production on the basis of direct labor-hours. During March, 520 backpacks were manufactured and sold. Selected information relating to the month's production is given below: Variable Manufacturing Overhead $ 1,456 $ 1,717 Materials Direct Used Labor Total standard cost allowed* $ 15,600 $ 7,280 Actual costs incurred $ 14,325 ? Materials price variance ? Materials quantity variance $ 1,590 U Labor rate variance ? Labor efficiency variance ? Variable overhead rate variance Variable overhead efficiency variance ? ? *For the month's production. The following additional information is available for March's production: 780 Actual direct labor-hours Difference between standard and actual cost per backpack produced during March $ 0.20 F Required: Hint: It may be helpful to complete a general model diagram for direct materials, direct labor, and variable manufacturing overhead before attempting to answer any of the requirements. 1. What is the standard cost of a single backpack? 2. What was the actual cost per backpack produced during March? 3. How many yards of material are required at standard per backpack? 4. What was the materials price variance for March if there were no beginning or ending inventories of materials? 5. What is the standard direct labor rate per hour? 6. What was the labor rate variance for March? The labor efficiency variance? 7. What was the variable overhead rate variance for March? The variable overhead efficiency variance? 8. Prepare a standard cost card for one backpack. Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Required 7 Required 8 Standard Cost Prepare a standard cost card for one backpack. (Round your answers to 2 decimal places.) Standard Quantity or Hours Standard Price or Rate Direct materials yards $ 6.00 per yard Direct labor hours per hour Variable manufacturing overhead hours $ 2.00 per direct labor-hour Total standard cost